Rotech Acquisition by Owens & Minor Clears $1.36 Billion Hurdle Despite Regulatory Obstacles
In a surprising turn of events, Owens & Minor, a leading healthcare solutions company, has terminated its planned acquisition of Rotech Healthcare Holdings, citing regulatory hurdles as the primary reason. The deal, announced in July 2024, was intended to provide "ample benefits to patients, payors, and providers," according to Owens & Minor CEO Edward Pesicka [1][3][4].
The termination, which was mutual, came after months of cooperation with the Federal Trade Commission (FTC). Despite the efforts, regulatory approval proved unattainable, leading to the decision to terminate the deal in June 2025 [1][3][4]. As part of the termination, Owens & Minor paid Rotech an $80 million termination fee and took steps to redeem $1 billion in notes and terminate related loan commitments that were intended to fund the acquisition [1].
The termination of the acquisition closes off an avenue to Owens & Minor's 2028 patient direct sales target. The company had anticipated the deal's closure by the end of 2024, but it was held up by the FTC's review [1]. The revenue decline for Rotech was largely anticipated and resulted from the falloff of COVID-era benefits in early 2024. Privately owned Rotech reported $750 million in net revenue in 2023, compared to approximately $725.8 million in 2024 [5].
Owens & Minor remains focused on its strategic priorities, including growing its Patient Direct business, strengthening its balance sheet, and considering potential sales of its Products and Healthcare Services segment [1]. The company expressed optimism about its future growth prospects in the home-based care market following the deal's termination [1].
The termination of the acquisition resulted in acquisition-related costs totaling $22 million in 2024 and $16 million in the first quarter of 2025 [2]. Owens & Minor's shares increased by 14% to close at $7.61 on Thursday following the termination of the acquisition of Rotech [6].
[1] Owens & Minor Press Release, June 2025. [2] Fitch Ratings Analysis, June 2025. [3] Owens & Minor CEO Edward Pesicka Statement, June 2025. [4] Federal Trade Commission Statement, June 2025. [5] Rotech Healthcare Holdings Financial Statements, 2023 and 2024. [6] Owens & Minor Stock Market Update, June 2025.
- The unexpected termination of Owens & Minor's acquisition of Rotech Healthcare Holdings, initially announced in July 2024, was due to unattainable regulatory approval from the Federal Trade Commission (FTC).
- The leading healthcare solutions company, Owens & Minor, paid an $80 million termination fee to Rotech and took steps to redeem $1 billion in notes, terminating related loan commitments that were intended to fund the acquisition.
- The termination of the acquisition negatively impacts Owens & Minor's 2028 patient direct sales target, a strategic priority for the company.
- Despite the termination, Owens & Minor remains optimistic about its future growth prospects in the home-based care market, aiming to strengthen its balance sheet and consider potential sales of its Products and Healthcare Services segment.
- The termination-related costs amounted to $22 million in 2024 and $16 million in the first quarter of 2025, as reported by Owens & Minor.
- Following the termination, Owens & Minor's shares increased by 14% to close at $7.61 on Thursday, indicating a positive response from the finance and business sectors.
- In the realm of medtech news, science, health-and-wellness, and finance, the termination of the Owens & Minor-Rotech acquisition raises questions about AI's role in regulatory approvals and the future of business mergers and acquisitions (M&A) in the healthcare industry.
